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COVID-19: Saudi Arabia Triples VAT rate, Suspends Monthly Allowance For Citizens

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Saudi Arabia government on Monday unveiled plans to triple its Value Added Tax (VAT) to shore up its economy hit by the crash of oil prices due to the coronavirus pandemic.
The government also said it would halt the monthly cost of living allowance for its citizens, Saudi’s official press agency reports.

The move is part of austerity measures to stake state finances as the income from the country’s mainstay, oil, continues to plummet.
According to its Finance Minister, Mohammed Al Jadaan, the VAT would be increased from 5 percent to 15 percent from July 1 while the monthly living handouts would stop from June 1.
“It has been decided the cost of living allowance will be halted from June 2020 and VAT will be raised from 5 percent to 15 percent from July 1,” Mr Al-Jadaan said in a statement posted on the Saudi Press Agency’s website.

The austerity measures, he said, would boost state coffers by 100 billion riyals (N10.3 trillion) as the government steps up emergency plans to slash spending to deal with the economic and social blows from the pandemic.

When in 2018, Saudi Arabia first introduced VAT as part of efforts to cut its reliance on world oil markets; it also introduced ‘the cost of living’ allowance to citizens to cushion the impact of rising costs.

There could be public resentment towards the new austerity measures amid coronavirus lockdown on businesses.
The Arab world’s biggest economy earlier shut down cinemas and restaurants, halted flights, and suspended the year-round umrah pilgrimage in a bid to contain the deadly virus.

But the finance minister insisted the measures were necessary to shore up state finances in the age of coronavirus that has sapped the global economy and has resulted in ‘sharp decline’ in oil revenue.

The government was also cancelling, extending or postponing expenditure for some government agencies and cutting spending on projects introduced as part of the ambitious ‘Vision 2030’ reform programme to diversify the oil-reliant economy, the minister added.

The minister had earlier warned of ‘painful’ and ‘drastic’ steps to deal with the double shock of the novel coronavirus and record low oil prices.

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Disparaging Dangote Uncalled For, Creating Bad Waves For Nigeria – AFDB President, Adesina

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The president of the African Development Bank Group, Akinwumi Adesina, has spoken out in defence of the Dangote Refinery, addressing concerns about potential monopolistic practices.

In a statement shared by businessman Femi Otedola on Tuesday via X, Adesina expressed his shock at the controversy surrounding Dangote’s operations, warning that it is “creating bad waves for Nigeria globally.”

According to Otedola’s post, Adesina argued that monopolies often arise in industries with high entry barriers or capital costs, citing railways and large-scale refineries as examples.

He was quoted as saying, “Monopoly often exists where there are high barriers to entry or high capital costs. How many individuals or companies can do railways? How many can do refineries of the scale of Dangote Refineries? In a nation that has been importing refined petroleum products for several decades, the abnormal simply became very normal.”

The AfDB President emphasised the significant investment made by Dangote, stating, “No smart investor would make a $19.5 billion investment and want it to be undermined by importers.”

He highlighted manufacturing challenges in Nigeria, describing the business environment as fraught with policy uncertainties and reversals.

“To manufacture is extremely expensive and risky. This is even more so in Nigeria, given the very challenging business and economic environment, fraught with policy uncertainties and policy reversals, and where the self-defeating default mode of “simply import it” is always so easily rationalized and chorused to solve any problem,” he said.

Addressing concerns about anti-competitive practices, Adesina said, “Competition is good for everyone. But is Dangote refineries anti-competitive? What is the evidence? Has Dangote Refineries prevented any other company from setting up refineries? Why have others not done so? How come they have not done so for several decades?

“Was it Dangote that held them back? But Dangote refineries surely cannot be asked to ‘compete’ with importers of petroleum products. That is not competition. Let the importers set up local refineries and compete by refining in Nigeria. That is fair and justified competition.”

Adesina stressed the broader economic implications of the refinery, stating, “We cannot and must not undermine, disparage or kill local industries, talk less of one that is of this scale — a jewel of industrialisation in Nigeria. It is more than simply delivering the cheapest product to the market.

“It is about domestic supply security, driving (and yes, protecting) globally competitive industries, maximising forward and backward linkages in the local economy, job creation, reducing forex expenses and shoring up the Naira. We must not be myopic.

“This whole disparaging of Dangote is uncalled for. It is self-defeating. And it is very bad for Nigeria. Who will want to come and invest in a country that disparages and undermines its own largest investor? Investing is tough. Pettiness is easy. It sadly sends a signal that the price for sacrificing for Nigeria is to get sacrificed.”

 

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BBC To Cut 500 Jobs As It Attempts To Save £200m For ‘Transformation’ Of The Corporation

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The BBC has announced plans to cut 500 jobs as it attempts to save £200 million to drive the “transformation” of the corporation.

Chief operating adviser, Leigh Tavaziva said it is making the changes to improve its premium video offering and digital capabilities.

It comes as the BBC is already attempting to save £500 million as part of a plan announced two years ago.

Tavaziva said “significant activity” is already underway to make the corporation “more flexible”.

She said: “In March this year we announced a requirement for an additional £200 million of savings and reinvestment plans to drive the continued transformation of the BBC.

“This will support greater investment into premium video content and further develop our digital capabilities.”

She added: “To further build our digital capabilities, whilst targeting efficiencies, over the next two years we will continue to close and transfer roles in some areas and create new roles in growth areas.

“This will result in a forecast net reduction of 500 roles in the public service by March 26, with further growth in targeted areas planned in our commercial group.

“To support these changes we will today be launching a new voluntary redundancy scheme for staff.

“Our priority remains to protect and champion the BBC’s fighting role as the UK’s public service broadcaster, for all our audiences both local and global.

“I would like to thank all colleagues for their continued efforts and commitments over the past 12 months.

“I am immensely proud of the exceptional content creativity, delivery, and innovation that our teams both provide and support every day.”

The BBC announced in March 2023 that it was to cut 1,000 hours of TV in order to save money, with half of that coming from sport.

In the same year, the corporation announced it was scrapping its in-house chamber choir, the BBC Singers, and reducing salaried orchestral posts across the BBC English Orchestras by around 20%.

In December 2022 it said that it was making £11m worth of cuts in local radio, which saw its 39 stations required to share content and broadcast less localised content.

Back in 2016, the BBC said it needed to cut £800m worth of costs, with £80m of that coming from news.

The move saw the Andrew Neil Show axed in 2020, along with 450 jobs in English regional TV news and current affairs, local radio and online news.

 

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I Have No Blending Plant Outside Nigeria, NNPC Boss Kyari Replies Dangote

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The Group Chief Executive Officer, Nigerian National Petroleum Company Limited, Mele Kyari has said he does not own a blending plant outside Nigeria.

Kyari stated this on Tuesday, July 23, while reacting to claims that some officials of the NNPC have blending plants in Malta.

Reacting in a post on his X handle (formerly Twitter), Kyari said he had been inundated with calls from family members and friends, asking if he truly owns a blending plant in Malta.

Kyari stated that he does not own or operate any business directly or by proxy anywhere in the world except a local mini-agricultural venture.

He also said he is not aware of any employee of the NNPC that owns or operates a blending plant in Malta or anywhere else in the world.

“I am inundated by enquiries from family members, friends and associates on the public declaration by the President of Dangote Group that some NNPC workers have established a blending plant in Malta thereby impeding procurements from local production of Petroleum products.

“To clarify the allegations regarding the blending plant, I do not own or operate any business directly or by proxy anywhere in the world with the exception of a local mini Agric venture, neither am I aware of any employee of the NNPC, that owns or operates a blending plant in Malta or anywhere else in the world.

“A blending plant in Malta or any part of the world has no influence over NNPC’s business operations and strategic actions.”

The NNPC boss threatened to sanction any official of the NNPC involved in such acts if they truly exist.

 

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